Industry Expertise · July 24, 2020

Why Property Managers Should Offer Landlord Insurance

Anyone who rents out a property they own takes on a significant amount of liability. If the roof gets damaged in a storm, the pipes freeze or burst, or railings become rickety, it's up to them to ensure the property's safety. And if a tenant or their guest gets hurt in the home or building, the landlord could be held responsible. That's why landlord insurance is so important. It covers the owner in the event that accidents like these disrupt the lives of tenants or damage the property.

But choosing a policy can be time-consuming for landlords. They need to figure out exactly what the insurance covers based on different policies and if these offerings meet their needs. Property management companies have an opportunity here to add value to their clients by handling landlord insurance on their behalf.


The value add

Landlords have enough on their minds without worrying about finding the right liability insurance. It can be difficult to determine which policies are best, and landlords may feel overwhelmed trying to compare carriers. But they already depend on you to manage their properties, so it makes sense that they'd trust you to handle their insurance as well. By recommending policies and facilitating enrollment, you take one more item off their to-do lists.

The drawbacks

Offering insurance takes a lot of work off your clients' hands, but it puts all those extra tasks into yours. To make this value proposition viable, you must find a reputable insurance company with which to partner and determine which types of policies to provide.

A basic policy will be the cheapest in terms of monthly premiums, but its coverage may not be as extensive as landlords want. If you manage properties in multiple geographic areas, you'll have to account for conditions in each place, such as likelihood of floods and hurricanes.

Policies and premiums will also be affected by each landlord's rental guidelines, including whether they allow tenants to smoke or own pets, as well as their rental periods—long-term versus month-to-month, for instance. You and your team will need to think through these complexities to determine a set of policies you can offer without adding significant overhead to your client dynamics.

Get it right

There are two key elements to successfully offering landlord insurance to your clients. One is establishing a solid relationship with an insurance partner. Your current business insurance provider may offer landlord policies and may be willing to work with you on a setup that makes it easy to extend coverage to your clients.

If that's not the case, research which providers offer landlord insurance and the types of policies in which they specialize. You'll then want to thoroughly vet them for customer service history, any legal issues they've had and to find out whether they've engaged in similar partnerships in the past.

The second component is ensuring that your team is ready to help landlords sign on for insurance through you. Make sure that they're prepared to help with enrollment and to explain what landlord insurance covers, as well as offer assistance if they should need to submit claims on their policies. Your insurance partner may be able to provide training so your team members are well-versed in the policies available to your clients and to answer ongoing questions throughout the relationship.

Next-level service

Landlords rely on your company to manage their properties, schedule repairs, manage rent payments and generally keep their properties in good standing and their tenants satisfied. Because you're already so integral to their rental business, facilitating landlord insurance is a natural next step in the relationship and can help differentiate your property management firm from the competition.

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This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.